Sandy Lau (12)
Cynthia Ng (25)
4C
This news is about the planners want to bulldoze the old buildings in Western and build a
$357 million park on the site.
Refer to the supply and demand graph of old buildings. As the planners want to bulldoze the old buildings, the supply of the old buildings decreases. (S
1
->S
2
) Since there is a poor transport network, it’s inconvenient for the resident to go to work. Also most of the grown ups went to the places which is nearer the city to find jobs, and they want to have a better living environment. The demand of the old buildings decreases. (D
0
->D
1
) The decrease in demand is larger than the decrease in supply due to many residents want to move. So, both the price and quantity transacted of old buildings fall (P
1
->P2) & (Q
1
->Q
2
)
Refer to the supply and demand graph of the public housing. As the old buildings and public housing are substitutes, they can replace by each other. As many residents move from the old buildings to public housing, the demand for old building decrease which lead to an increase in demand for public housing. (D
0
->D
1
) But the supply of public remains unchanged at every price as it is provided by the government. So, the price increases and the quantity transacted remains unchanged (P&Q)